Cashless India: The inevitable transformation

In one of Arnold Schwarzenegger’s well known Hollywood sci-fi movies, The 6th Day, he pays his cab fare via a thumbprint sensor. While the world may not have yet come to a stage where one could make financial transactions using such futuristic technology, we most certainly have come to a point where the need to carry or even use physical cash is diminishing by the day - thanks to the plethora of e-wallet and debit/credit card options available in the market.

India however, is still a cash dependent economy, with about 90% of all known transactions being cash-based. Nearly 70% of the population lives in rural India where the banking penetration is virtually non-existent or leaves much to be desired. Novel programmes such as the Jan Dhan Yojana and the Aadhaar scheme - a mega digital database designed to give hundreds of millions of Indians a unique ID, are great initiatives that can help the government achieve its goal of digitally empowering Indians with the aim of helping them lead better lives.

Nevertheless, the government must still look at adopting new programmes and schemes to provide and equip people with resources that would encourage many to go the cashless way. While it certainly looks like a herculean task, it is not impossible to implement if envisioned properly. If mobile wallet companies like Paytm and MobiKwik could witness record number of daily transactions on account of the currency ban, it goes to show that people are neither unfamiliar nor averse when it comes to using such resources, which as a matter of fact, are also way more secure than card transactions.

Take the example of Akodara - a small village located about 90 km from Ahmedabad, in Sabarkantha district of Gujarat with a population of 1200. It also happens to be India’s first digital village and was adopted by a leading bank recently as a part of the Digital India campaign.

Going cashless was not a big deal for them as the village’s 220 families had e-banking facility. The families use it for buying milk, groceries and other essentials. Their phones use the village Wi-Fi to link to their bank accounts and to make instant transactions smoothly. The village grocer accepts payments through e-banking for any purchase above Rs. 10 which is a world’s first. Since last year, the local dairy cooperative has also stopped paying farmers in cash and instead transfers the money into their bank accounts directly, making the process much easier. The villagers also have their bank accounts linked to their Aadhaar cards, so government benefits are also transferred directly into their savings accounts.

If all this were possible with a tiny village, how much more can be accomplished if we were to have every other Indian city and village wholly adopt these technology resources and make use of the wide-array of services that are on offer by a number of businesses!

Undoubtedly, India is already in the midst of a rapid digital transformation - a transformation that is seeing mobile devices like smartphones and the proliferation of data have a substantial bearing on the supporting Infrastructure and Operations (I&O).

It is also likely that processes like demonetization will see a lot more people transitioning over from offline to online and starting to use various digital platforms more frequently to carry out most of their daily tasks. This is also a great Plan B for those who are looking to avoid any kind of financial insecurity or inconvenience on account of any similar unexpected monetary changes in future.

This online transition, however, is very likely to lead to a deluge of data being created, which will dramatically impact servers, storage, networking, facilities and IT operations, apart from creating new security challenges as well.

Technology evolution in India will continue to take off if people are encouraged to opt for online resources to carry out their transactions in a hassle-free and secure manner. This however can only take place if there is a seamless movement of data across all borders, aiding both businesses and consumers, thereby empowering them to access the best available technology and services irrespective of where those resources may be located. We are at the cusp of leapfrogging to a cashless economy from being overtly cash centric and that augurs well for the future.

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